FAST FIVE: FOMC Minutes Signal Governors Divided Over When To End Policy-Easing
And The Fed rate-cut appears to have perfectly top-ticked US Macro data also.
Some participants judged that a prolonged inversion of the yield curve could be a matter of concern.
With inflation pressures muted and US inflation likely being weighed down by global disinflationary forces, policymakers saw little chance of an outsized increase in inflation in response to additional policy accommodation and argued that such an increase, should it occur, could be addressed in a straightforward manner using conventional monetary policy tools.
On turmoil in the repo market : developments in money markets “implied that the Committee should soon discuss the appropriate level of reserve balances.” On balance sheet expansion: A few noted the “possibility of resuming trend growth of the balance sheet to help stabilize the level of reserves in the banking system” and several participants suggested that they could also benefit from “considering the merits of introducing a standing repurchase agreement facility.” And, so in three weeks, we went from “a few” to Powell making the decision to go ahead with NotQE.
And finally, The Fed is worried about a bubble A few of the participants favoring an unchanged target range for the federal funds rate also expressed concern that an easing of monetary policy at this meeting could exacerbate financial imbalances.